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SINGAPORE: Asian stocks bounced back on Wednesday after the US Federal Reserve cut interest rates in an emergency move to calm investor nerves about a deteriorating US economy and stop a global rout on the markets.
Singapore's key Straits Times Index opened 4.02 percent or 115.31 points higher at 2,981.86, reversing two straight sessions of losses amid a global sell-off on fears a US recession would hit the rest of the world.
Japan's benchmark Nikkei-225 index rose 3.7 percent or 470.18 points to 13,043.23 in early trade. The broader TOPIX index of all first-section shares was up 44.04 points or 3.6 percent to 1,264.58. On Tuesday, Tokyo share prices tumbled 5.65 percent to a 28-month low.
South Korea's KOSPI index surged 45.5 points, or 2.83 percent, to 1,654.52 in the first 15 minutes of trading on Wednesday.
Australian and New Zealand shares also rose. Australian shares opened 318.7 points or 6.1 percent higher at 5,505.5, after suffering its worst one-day percentage drop since October 1989 on Tuesday. New Zealand's NZX-50 was up 0.8 percent at 3,632.61, and appears set to break 14 straight days of losses.
But traders ruled out a strong recovery in global markets, noting that Wall Street did not end in positive territory despite the better sentiment after the US rate cuts.
US stocks skidded but averted a meltdown on Tuesday. The Dow Jones Industrial Average slid below 12,000 points for the first time since November 2006 but rebounded from its worst levels, ending with a loss of 128.11 points (1.06 percent) at 11,971.19.
Before the opening of Wall Street trading on Tuesday, the Fed cut its benchmark federal funds rate - the rate banks charge each other for overnight loans - by 0.75 percentage points to 3.50 percent. It also cut its discount rate by the same 75 basis points to 4 percent. The discount rate is the rate the Fed charges to member banks for short-term loans. - CNA/ir
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